Could a shack-up help your real estate dreams stack up?
The many and varied faces of Toronto’s real estate agent fraternity.
Joyous, as they dashed (note past tense) bank-wards to deposit hefty commission cheques destined for their home fund. Stony faced whilst squaring up bravely against market hesitation. And (perhaps most recently) downright furious, with facial demeanor akin to a bulldog chewing a thistle.
But come on: surely it’s not all doom and gloom? We need only reference Vancouver (and the way the market bounced back, post tax levies) to suggest the GTA property game is far from over.
And we speak from personal experience, with stories that fly in the face of the market’s supposed downturn. We were recently embroiled in, and subsequently heartbroken by, two multiple offer deals (those greedy bidders: we’ll win the next house!) so we remain wary of Toronto’s bricks and mortar landscape.
Guess we can’t ignore the math. The reverse spike is tangible with property values down by as much as 15 per cent (if some commentators are to be believed) month over month. As such, navigating the property ladder remains an arduous science, particularly for younger, first- or second-time buyers, many of whom are unnerved by the market’s vertiginous ups and unsettling downs.
Whilst sellers’ expectations have been somewhat moderated by nervous buyers, houses are indeed still selling, albeit for less, and after longer on the market.
This in mind, might it now be the perfect time for newbies to enter the buying foray? Our younger clients are certainly ambitious, but financing struggles remain — not least because of higher interest rates and nervous bank managers. But, regardless of dips, one solution is to share the risk. Via co-purchase.
Whether enabled by a friend or partner (or even a parent), “double dipping” could make life significantly easier. And a shared risk, after all, is a risk halved. Or, at the very least, chopped into a percentile variable according to how much each party commits to the deal.
When filming a recent TV segment, we mentored a young couple who simply couldn’t navigate their own real estate conundrum. One half of the pairing, David, owned a large condo in Yorkville while his girlfriend Claire had a compact apartment at Yonge and St Clair. As their relationship blossomed, both developed itchy feet but neither had any idea quite how to progress.
Should they sell both places and combine forces? Rent both homes and, with the gathered income, buy something together? Combine forces and move into one of their two properties? Shack up? Or shake up? Shape up or ship out? Decisions, decisions.
Dispatched by our director, we visited both spaces at which point it became abundantly clear: While appraising, David thought his home, as it was, might attract around $3,500 rental per month. We suggested he spend $15,000 to revamp his dated kitchen with new counters, doors and backsplash.
Furthermore, we recommended a fresh coat of paint be lavished throughout every caramel-painted dowdy room. Jeesh. Auspicious styling and propping would seal the deal, making his condo “relevant” for those who would be prepared to pay the $4,500 we anticipated the market would bear. His mortgage was $2,500 per month so there was a potential monthly profit — less costs — of $2,000.
As for Claire? Well, her dainty condo (which we thought a little overpriced at $390,000) had been on the market for several months so we suggested a radical declutter (to optimize space) and the removal of chintzy artwork (sorry Claire if you’re reading this, but ‘sh’art’ is so off-putting) that was muddling the condo’s stylistic message. New bedding (C+J Home at HomeSense: what else?) and slick window blinds (to replace the baggy drapery that was fussing fenestration) provided an altogether market appropriate esthetic.
Furthermore, we suggested Claire drop her start price by $40,000, which brought more people through the door and resulted in a sale the following week at just $2,000 shy of her original price. Spool forward a couple of months and they’re buying a new westside Baby Point detached home, bolstered by the eventual profits from Claire’s condo and the monthly rental yield of the Yorkville property. Result: Job done. Go team.
Moving in for financial reasons
While it’s obvious two incomes offer more spending power than one, take a tip: explore combined finances, before shacking up, to ensure your individual balance sheets balance up. Are your salaries similar? How will you split expenses, utility bills and property taxes? These are areas that must be explored before diving into the oft shark-infested waters of cohabitation. Seek legal advice and consign your agreement to paper as a contract. Arguments over money can bring out the worst in the nicest housemate (romantically linked or otherwise), so cross every T and dot every I to establish a financial plan which suits both flips of the fraternizing coin.
Moving in for love
In the romantic context, if you practically live together anyway, surely it’s sensible to pool resources and invest in one home? Your bank manager suspects it’s a good idea and — if you’re entirely honest — so, too, do you. Come on: you wear each other’s shirts. You sit on each other’s loos. You walk each other’s dogs. You plunder each other’s Netflix accounts. You have keys to each other’s front doors. Seriously. Enough already.
For many potential cohabitees, however, a minefield of worry precedes that bricks and mortar union. It’s the classic Nervous Nellie niggle: “I know it makes sense, but I’m a lil’ neurotic.” Hmm. “If I work 9-5 and need eight hours of sleep, will my partner’s oppositional pattern lead, ultimately, to a nasty property divorce?”
And so the plot thickens. Does one half of the potential pairing have habits with which the other will struggle? Drinking? Smoking? An unhealthy obsession with Game of Thrones? In our experience, compatibility — or an innate skill for compromise — counts to ensure the happy shack-up remains just that. Rather than a messy shake-up further down the line.
Work together to create a shared vision
When worlds collide and shack-ups take place, there are bound to be muddied waters and mixed-up signals, especially when it comes to finding, furnishing and equipping the new communal space. A second bathroom, for example, is generally preferable, but do you really need to stuff the new den with gym equipment? Does your new, shared start have to include every bit of your single past? Are two fondue sets (they’re a thing again, right?), two coffee tables and four sofas entirely necessary? And if your beau’s cumbersome leather sectional is cramping your dreamy, mid-mod coffee table, then clearly it’s time to purge.
That said — remain mindful of your other half’s emotional attachments to “things”. Don’t bulldoze. Remember discussion. For inspiration, surf Pinterest, Instagram and Houzz, aspiring, all the time, to a shared vision of comfort and style.
But first things first: get that leather sofa on Kijiji so that someone (infinitely less stylish than you) can learn to love it. And then put those dollars towards (what you’ll explain is) a compromise. But of course it’ll be something you like.
Reverse psychology aside, don’t think you’ll get around to purging later: removals cost money, so be practical and do it all before packing. There is little point, after all, paying to lug boxes of stuff that will simply occupy space in your new home.
To make matters easier, we recommend sorting out both your lives into the four Ts:
Things with which you just can’t live without in your new home.
Broken, dated or bad taste items. These should be purged immediately. Be honest, there’s no room for misplaced sentiment.
If you don’t need it (and it could benefit someone else), donate it to a responsible charity such as Furniture Bank. You’ll free up valuable space whilst amplifying your own feel-good factor. A win win.
With sites such as Swapsity becoming increasingly popular, now’s a great time to hone your bartering skills. Don’t forget Kijiji and Craigslist if you want to clear space and raise extra funds.
Facing the future
Of course no one can predict what lies ahead. Relationships, just like the stock and property markets, can go up, as well as down. So analyze “futures” before inking that contract and include a couple’s caveat as protection should one party suddenly need to get out due to a change of circumstances. But let’s not be fatalists. It’s all going to work out perfectly, right?
Suitably shacked up, it won’t be long before the dollars stack up. And, in a jiffy you’ll be making sweet music with a playlist that’s more about The Spice Girls’ Two Become One than The Beach Boys ‘I Get Around’.
Admit it: You’re a property marriage made in heaven. So when will you say: “I do”?